One-glance verdict
Undervalued
$194.93 our estimate vs market $94.78
Wall Street consensus: $146.71 (-24.7% lower than our fair-value estimate)
51% below our estimate, below the bear case
Fundamentals snapshot
EPAM Systems, Inc.
EPAM · NYQ · Technology · Information Technology Services
Current price
$94.78
52-week range
$89.25 - $222.53
Market cap
$4.95B
Balance sheet
Healthy
301.10x Strong cushion
Net cash $749.02M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
1 Risk
2 rewards · 1 risks
- Reward Revenue grew 1.8% last year.
- Reward Free cash flow was positive in 10/10 years.
- Risk Operating margin compressed from 11.9% to 9.5% over 3 years.
What this company does
EPAM Systems, Inc.
EPAM Systems is a technology consulting company that helps other businesses design, build, and maintain their software and digital tools. It makes money by charging clients in industries like finance and healthcare for its expert engineering services, which range from creating mobile apps to managing data. This matters because many large companies need specialized outside help to build the modern technology required to stay competitive and serve their customers effectively.
How the company got here
Founded in 1993, EPAM Systems started by connecting engineering talent from Eastern Europe with businesses in the United States. The company's big break came in the mid-1990s when it developed a sales and warehouse management system for the fashion brand Bally of Switzerland and later worked with software giant SAP. This early success in handling complex projects helped EPAM build a reputation for high-quality software engineering. Over the years, it expanded its services and global presence through strategic acquisitions and by focusing on new technologies. A major milestone was its initial public offering (IPO), which is when a private company first sells shares of stock to the public, on the New York Stock Exchange in 2012.
What it actually does
EPAM Systems is a company that other businesses hire to design, build, and improve their technology. Think of them as expert builders for the digital world. For example, if a bank wants to create a new mobile banking app, or a retail store wants to build a better online shopping website, they might hire EPAM to handle the project from start to finish. They provide the engineers and consultants who specialize in things like custom software, cloud computing (storing and accessing data over the internet), and data analytics (finding useful patterns in large amounts of information).
Digital Platform Engineering & Software Development
This is the core of EPAM's business, where they help clients create and modernize the technology that runs their operations. This includes building custom software, moving a company's applications to the cloud, and ensuring everything runs smoothly and efficiently. Clients from various industries like financial services, healthcare, and retail pay EPAM for these engineering and development services. This segment is the company's primary way of making money, focusing on complex, large-scale projects rather than simple IT support.
Consulting and Business Transformation
Beyond just writing code, EPAM also advises companies on how to use technology to improve their business. This involves helping clients develop a digital strategy, improve their customer experience, and become more innovative. For example, they might help a company figure out how to use artificial intelligence to automate tasks or better understand their customers. This part of the business helps EPAM build long-term relationships with clients by acting as a strategic partner in their digital journey.
What management is betting on now
EPAM's leadership is heavily focused on artificial intelligence (AI) as a major area for future growth. They are investing in developing their AI capabilities and helping their clients use AI to transform their businesses. The company is also making strategic acquisitions to expand its expertise in high-growth areas like cloud computing and cybersecurity. Another key priority is expanding their global presence, particularly in markets like India, to access a wider pool of talent and clients.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$52.32M
FY2024 Q3
$237.00M
FY2024 Q4
$114.53M
FY2025 Q1
$14.83M
FY2025 Q2
$43.37M
FY2025 Q3
$286.38M
FY2025 Q4
$268.11M
FY2026 Q1
$-54.22M
Revenue
$1.40B
Net income
$82.52M
Diluted EPS
1.52
Operating cash flow
$-36.36M
Free cash flow
$-54.22M
Fetching…
Sources
Revenue
$1.41B
Net income
$109.35M
Diluted EPS
1.97
Operating cash flow
$282.89M
Free cash flow
$268.11M
Fetching…
Sources
Revenue
$1.39B
Net income
$106.82M
Diluted EPS
1.91
Operating cash flow
$294.68M
Free cash flow
$286.38M
Fetching…
Sources
Revenue
$1.35B
Net income
$88.03M
Diluted EPS
1.56
Operating cash flow
$53.20M
Free cash flow
$43.37M
Fetching…
Sources
Revenue
$1.30B
Net income
$73.48M
Diluted EPS
1.28
Operating cash flow
$24.16M
Free cash flow
$14.83M
Fetching…
Sources
Revenue
$1.25B
Net income
$103.30M
Diluted EPS
1.80
Operating cash flow
$130.26M
Free cash flow
$114.53M
Fetching…
Sources
Revenue
$1.17B
Net income
$136.35M
Diluted EPS
2.37
Operating cash flow
$241.96M
Free cash flow
$237.00M
Fetching…
Sources
Revenue
$1.15B
Net income
$98.64M
Diluted EPS
1.70
Operating cash flow
$57.03M
Free cash flow
$52.32M
Fetching…
Sources
Is it cheap or expensive?
Fair value $194.93 vs current price $94.78
Wall Street consensus is the average analyst price target: $146.71 (-24.7% lower than our fair-value estimate).
Our most-likely fair value is $194.93 a share — about 105.7% above today's price of $94.78, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $749.0M - more cash than debt. Interest coverage 301.1x.
Net debt
$-749.02M
Interest coverage
301.10x
EPAM Systems, Inc. is healthier than 0 of 1 peers on balance-sheet leverage.
Healthy
Worse cushion
Baseline
Better cushion
EPAM
BASELINE
EPAM Systems, Inc.
Total debt $287.94M Interest coverage 301.10x This is the baseline the peer rows are being compared against.
What you should know
The case for and against EPAM
2 Rewards
1 Risk
Rewards
-
Revenue grew 1.8% last year.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 11.9% to 9.5% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
13.62x
Forward P/E
6.72x
P/B
1.46x
P/S
0.89x
EV/EBITDA
5.60x
PEG ratio
0.48x
Profitability
How much profit each dollar creates
Gross margin
29.1%
Operating margin
9.5%
Net margin
7.0%
ROE
10.9%
ROA
8.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.08x
Current ratio
2.67x
Quick ratio
2.52x
Total debt
$287.94M
Total cash
$1.04B
Growth
How the business has been compounding
Revenue TTM
$5.56B
Revenue 5Y CAGR
9.8%
EPS TTM
6.96
EPS 5Y CAGR
-1.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$594.41M
Free CF TTM
$612.69M
FCF margin
11.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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